ERC Fraud Investigations Ramp Up

ERC Fraud Investigations Ramp Up. This might go down as one of the most fraud-wrought tax programs Congress has ever deployed.

Yesterday (Nov 2nd), the IRS presented a free webinar providing updates on the ERC program.

In a news release announcing the webinar, they stated publicly that they’ve uncovered more than $8B (yes BILLION with a B) in suspected ERC fraud, but a preview of other statistics by Jim Lee, deputy chief of Criminal Investigations with the IRS, have put that fraud number at $37B.

Congress initially estimated the entire program would cost around $55B. It now has paid out $230B - if the $37B of projected fraud is accurate, that’s a 16% fraud rate.

The IRS has initiated investigations into over 300 ERC cases, with 15 currently charged, and four sentences with an average of 21 months of prison time.

There is also talk that the voluntarily withdrawal program (for those who haven’t received funds or received them and didn’t cash the check) might have a very tight window and only be available until January 2024.

Anytime there is lots of free money up for grabs, there is going to be fraud. The unfortunate part is a lot of this could have been mitigated if the IRS had set out clearer guidelines around who was eligible for the credit

Avoid the headache and hire an educated professional: 808.546.5026 ext. 303 or info@verity.cpa!